tag:blogger.com,1999:blog-9825782.post481044148797588858..comments2023-10-28T03:54:56.826-07:00Comments on Writing, Is? Fun!: Narendra Modi, Nano, YSR, and SatyamRamiah Ariyahttp://www.blogger.com/profile/04792893365470748755noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-9825782.post-45802353448256194752011-07-06T21:17:04.282-07:002011-07-06T21:17:04.282-07:00hi
I agree to the view that individual busineses ...hi<br /><br />I agree to the view that individual busineses should not be favoured. But i disagree with your view on sez or software or favoring an industry in general the reason is that there are other countries in the world and to stay competitive you have to match the policies and subsidies that others may procide. As an example look at china by manipulating currency and having state acting a so called croony capitalists they have made china the strongest growing economy..today the largest the fastest the tallest the longest the deepest all you will find in china. all over the world manufacturing suffered..toy factories closed down because other countries could not give the subsidies and state support that china gave. Your arguments on free economy will only be practical in a utopian world where all countries follow same policies. specific to auto thailand is the biggest hub of autos in asia and now china picking up because of state support. The inefficiencies that our country has in terms of lack of infrastructure, trained manpower, ports, facilities, high interest rate are all local and to compete with the world states like gujarat have to give subsidies to businesses to negate the effect and bring businesses and jobs to india.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9825782.post-72438392652076559182010-01-10T09:58:59.919-08:002010-01-10T09:58:59.919-08:00Hi There I'd like to thank you for such a grea...Hi There I'd like to thank you for such a great quality site! <br />thought this would be a nice way to introduce myself!<br /><br />Sincerely,<br />Laurence Todd<br />if you're ever bored check out my site!<br />[url=http://www.partyopedia.com/articles/hollywood-party-supplies.html]hollywood Party Supplies[/url].Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-9825782.post-84899540728987976392009-08-20T06:01:34.865-07:002009-08-20T06:01:34.865-07:00Thanks for your time on this Ram, I'm clear no...Thanks for your time on this Ram, I'm clear now :)AlvaThunduhttps://www.blogger.com/profile/15279983757070530642noreply@blogger.comtag:blogger.com,1999:blog-9825782.post-558778924296130772009-08-20T02:17:10.802-07:002009-08-20T02:17:10.802-07:00Let us summarize this argument - Your first questi...Let us summarize this argument - Your first question was about Modi investing in Tata which I explained is possible if he does it with his own money.<br />Your new question is this - if government can invest in SEZs, then why not Gujarat with Tata.<br /><br />First of all, SEZs are bad by economic theory. Most economists are clear about that. I have written about SEZs in this blog itself, here: http://ramsrants.blogspot.com/2008/03/are-sezs-good-thing.html<br /><br />Now, let us assume that SEZs are ok; atleast they allow any company which fulfills a certain set of criteria (such as export-orientedness). Thus SEZs are STILL better than handing over money to a single company. It does not matter if the company is Indian or not. That is irrelevant for economics.<br />The reason is, government favoring a single business group instead of a general set of businesses is "Crony capitalism". This is the subject of my whole post. Let us say that Gujarat allowed car manufacturers in general to setup shop in the state for certain subsidies. If those subsidies are not a big sell-out, then this policy is ok (kind of). The reason is that then the government role becomes "encouraging" different manufacturers to compete for the consumer's choice. The consumer benefits in that case and competition keeps the cars on technology edge.<br />Instead if you take all your money and start pouring it down a SINGLE businessman then you are basically bribing a single businessman to somehow solve problems that HE HAS NO INCENTIVE TO SOLVE. He gets so much largess from the state that he has no reason to fear competition. Presto - Modi has created a kind of public sector company with no control over its functioning.<br />This is all sound economic theory by the way - I am not saying anything new here. NO developed country encourages individual businessmen by subsidizing them - at best, whole industries are subsidized. NEVER a single businessman.<br /><br />Now, your comment seems to show a set of fundamental misunderstandings. Let me clarify those:<br />1. Government is not a business group. That is, it is not the role of government to take public money and "invest" or "encourage" businesses. There are good economic reasons for why this is the case. Government's role is to REGULATE businesses. <br />I think our national media has somehow blurred this important role and made it sound like government is another type of business. It is not.<br /><br />2. Government CANNOT provide a "helping hand" to businesses randomly. That would just make sure those businesses have no reason to fear competitors. <br /><br />Again, it has become a trend in India to justify such investments by the state governments. These sort of payments to individual businesses is a disaster and is against economic theory and is not practiced in any capitalist society. The reason it happens in India - the explanation is really simple; the governments are not interested in "encouraging" anyone. They are simply doing this because government leaders get "subsidies" in return.Ramiah Ariyahttps://www.blogger.com/profile/04792893365470748755noreply@blogger.comtag:blogger.com,1999:blog-9825782.post-81288795974468299442009-08-20T00:58:55.209-07:002009-08-20T00:58:55.209-07:00Absolutely, I buy it, I never said either, probabl...Absolutely, I buy it, I never said either, probably I should'nt have used the word investment there I dont want to use the word encourgement which will make me sound Pro-Modi :). All that I want to share was Modi's helping hand to Tata, is something like SEZ across India, which I meant as investment from government, which Ford, SaintGobian, Mahindra IT Park, CocaCola, Catepillar Inc India and etc enjoyed in India. Then why not an Indian company for Indians, all these above mentioned foreign compaines have also got few thousand crores as investment from the respective state and central government (Public Money) which Tata is also getting from Gujarat Government. I'm only seeing Nano Plant asn SEZ. Why did TN government invest in MRF and with whose money? why did AP Government invested on Ongole Mills and with whose money? I'm definetely not conisdering CM's/PM's as owner of Government money. I'm not sure exactly what you mean by enabling market competition?AlvaThunduhttps://www.blogger.com/profile/15279983757070530642noreply@blogger.comtag:blogger.com,1999:blog-9825782.post-40333593063823859732009-08-19T06:00:02.202-07:002009-08-19T06:00:02.202-07:00But, Mr.Alva, Modi is not investing his money. Whe...But, Mr.Alva, Modi is not investing his money. When did we get the idea that the state governments can just take public money and "invest" in certain corporations? BSE and NIFTY will down their shutters if Individuals look for guarantees, correct. But no one is complaining that Modi is investing his own money. <br />The complaint is when a government starts supporting individual corporations instead of enabling market competition. <br />I think you consider Modi as somehow the "owner" of government money. He is not. Therefore it is not "Modi's investments" vs "Tata's investments".Ramiah Ariyahttps://www.blogger.com/profile/04792893365470748755noreply@blogger.comtag:blogger.com,1999:blog-9825782.post-31764312631854305562009-08-19T04:39:02.442-07:002009-08-19T04:39:02.442-07:00Excellent analysis, and fruitful points/arguements...Excellent analysis, and fruitful points/arguements, I totally buy this, it is true that Modi cannot guarantee the success of Nano, however investments are chances what Modi investments here are just a fraction when compared to Tata's investment, and if everyone start looking for such guarantee's then BSE and NIFTY has to shut down there shutters, I think :)AlvaThunduhttps://www.blogger.com/profile/15279983757070530642noreply@blogger.com